plaintiff. Verdict and judgment for the Plaintiff in the sum of $11,900; Defendant to pay interest on that sum from 12 December 2017 to date under s 100 Civil Procedure Act 2005 and District Court Practice...
Key principles
Section 208 of the Residential Tenancies Act 2010 (NSW) applies where the court is satisfied that, having regard to the subject-matter of the proceedings, the taking of...
Even where s 208's threshold is met, the court must not order that the plaintiff pay the defendant's costs if the court forms the opinion that doing so would be 'unjust'; that...
Uniform Civil Procedure Rules 2005 r 42.35 operates to deny or limit ordinary costs awards where a plaintiff who obtains judgment in the District Court in an amount below...
A successful plaintiff is ordinarily entitled to costs, and interest under s 100 of the Civil Procedure Act 2005 can be awarded on the judgment amount; the Tribunal can also...
Issues before the court
Whether s 208 of the Residential Tenancies Act 2010 (NSW) applied to require the plaintiff to pay the defendant's costs because the Tribunal made...
Plain English Summary
The District Court awarded the plaintiff $11,900 plus interest for tenancy-related breaches. The defendant sought its costs under s 208 of the Residential Tenancies Act 2010, arguing the Tribunal could have dealt with the dispute. The Court found the Tribunal could have provided adequate enforcement, but because the legal and factual complexity and uncertainty about Tribunal jurisdiction made the plaintiff's forum choice not unreasonable, it would be unjust to penalise the plaintiff under s 208. Separately, UCPR r 42.35 operating between District and Local Courts meant the plaintiff had not shown it was warranted to proceed in the District Court rather than the Local Court; accordingly the Court made no order as to costs and each party bears its own costs.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Whether UCPR r 42.35 disentitles the successful plaintiff from a favourable costs order because the proceedings were brought in the District Court...
Whether the plaintiff is entitled to pre-judgment interest on the judgment amount.
This is a post-trial costs decision following a substantive District Court trial between Mr Bruce Alan Pursell (Plaintiff) and Eversham Close Pty Ltd (Defendant) about landlord/tenant issues. The primary reasons for judgment (delivered 13 February 2020) awarded compensatory damages to the plaintiff in the sum of $11,900. After judgment the parties could not agree on costs. The defendant sought an order under s 208 of the Residential Tenancies Act 2010 (NSW) that the plaintiff pay the defendant's costs on the basis that the Tribunal (NCAT) could have adequately enforced the rights at issue, and alternatively relied on UCPR r 42.35 to argue the plaintiff should not obtain costs because the District Court proceeding (for a judgment below the relevant threshold) was not warranted. The plaintiff sought its ordinary costs and also claimed pre-judgment interest under s 100 of the Civil Procedure Act 2005 (NSW). The Court (Hatzistergos DCJ) received written submissions, considered the statutory tests and authorities, and delivered orders on 23 March 2020: judgment for the plaintiff for $11,900 with interest from 12 December 2017; and no order as to costs (each party to pay its own costs). The key legal battlegrounds were (1) whether s 208 RTA applied and, if so, whether it would be unjust to apply it, and (2) whether UCPR r 42.35 disentitled the plaintiff from costs because the action was tried in the District Court rather than the Local Court.
Why the court decided this way
Two separate but overlapping statutory regimes informed the costs outcome.
Section 208 RTA 2010
The threshold under s 208 is whether, having regard to the subject-matter of the proceedings, taking the proceedings in court was not warranted because the Residential Tenancies Act made adequate provision for enforcement by the Tribunal of the rights concerned (statutory text cited in the judgment).
The judge set out five points about s 208, emphasising that the focus is on the 'rights concerned', the Court must 'have regard to the subject-matter', and 'adequate provision' means sufficient means to enforce the rights, not necessarily identical procedural remedies (the relevant exposition appears in the consideration of s 208, see the passage beginning at the statutory text and the formulation of the adequacy test).
The Court found the Tribunal had power to award compensation under s 187, so in that sense the Tribunal could have enforced the rights that were vindicated in court (see [22], [26]). The Court therefore accepted that the s 208 threshold could be met.
However, s 208 contains an exception: the court must not order costs against the plaintiff if it would be unjust to do so. The judge probed legislative history and analogous authorities (including earlier s 120A and commentary). The added 'unless unjust' qualifier was given weight. Citing R v Bowen and related commentary, the judge observed the 'unjust' inquiry is an evaluative exercise where reasonable minds may differ.
Applying that evaluative test to the case, the Court found the case had factual and legal complexity, including uncertainty whether the Tribunal's monetary jurisdiction would have reached the same outcome; this made the plaintiff's decision to bring court proceedings not a straightforward misadventure warranting punitive costs (see [31]–[33]). On that basis, the judge concluded that, despite the s 208 threshold being met in principle, it would be unjust to order the plaintiff to pay the defendant's costs.
UCPR r 42.35
Rule 42.35 operates differently: where a plaintiff obtains judgment in the District Court for less than a specified amount and would ordinarily be entitled to costs, the court will not usually order costs unless it is satisfied the commencement and continuation in the District Court rather than the Local Court was warranted.
In assessing whether the proceeding was warranted in the District Court the judge assessed factual and legal complexity. The Court considered authorities (including Singapore Airlines and Averkin) that identify complexity as a relevant justification for a higher forum.
The Court found that, notwithstanding some complexity, there was no expert evidence and the main contractual provisions had been previously considered. The claim fit comfortably within the Local Court's jurisdiction (which extends to $100,000) and the plaintiff offered no affirmative basis to satisfy r 42.35 that District Court forum was warranted. The Court therefore concluded r 42.35 applied so the ordinary costs entitlement did not operate in the plaintiff's favour (see [34]–[40]).
Finally, the judge resolved the competing considerations by granting judgment and interest to the plaintiff, but making no order as to costs, in effect the s 208 exception (unjust) protected the plaintiff from paying the defendant's costs, while r 42.35 prevented the plaintiff recovering costs from the defendant.
Before and after state of the law
Before this decision:
The statutory framework already contained s 208 RTA with its cost-shifting design to discourage forum-shopping to superior courts where the Tribunal could enforce tenancy rights. Its predecessor s 120A under the 1987 Act was more absolute.
UCPR r 42.35 has been applied in prior authority to discourage plaintiffs bringing small or medium-value matters in higher courts without justification; Averkin and Singapore Airlines are cited authorities recognising complexity as a potential justification.
What this decision confirms:
The meaning of 'adequate provision' in s 208: it is an adequacy/enforcement sufficiency test, not identity of remedies, the Court must ask whether the Tribunal could have brought about the same legally binding outcome (see [17], [21]).
The 'unless it would be unjust' qualification in s 208 is substantive: the Court must assess whether penalising the plaintiff would be unjust, and the presence of legal/factual complexity and uncertainty about Tribunal jurisdiction can render an order unjust (see [31]–[33]).
UCPR r 42.35 remains effective to preclude costs for plaintiffs who cannot establish a reason why the District Court (instead of Local Court) was warranted; claims that escalate without explanation or lack of expert/legal complexity are vulnerable to r 42.35 (see [34]–[40]).
Thus the judgment reconciles the deterrent purpose of s 208 with a protective judicial discretion in 'unjust' cases, while maintaining the deterrent effect of r 42.35 for inappropriate forum choice.
Key passages with plain-English translation
"The question to be posed is could the Plaintiff have obtained relief under the 2010 Act which would have enforced (in the sense of brought about in a legally binding way) the same outcome secured by the declaration which the Court has decided it will make." (Court's exposition of 'adequate provision'.)
Plain English: Ask whether NCAT could have legally achieved the same result the court ordered, not whether NCAT does exactly the same procedures or labels.
"As I see it, the purpose of s 208 as now enacted is not to punish a Plaintiff who misjudges their ultimate success... but rather to act as a disincentive to bring proceedings which were not warranted..." (Court explaining the legislative purpose.)
Plain English: The law intends to stop people bringing cases to court when they should have used the Tribunal, but it does not seek to punish honest mistakes about forum selection.
"Although I accept that the analysis involved some complexity... In my view the matter fell well within the Local Court's jurisdiction..." (On r 42.35.)
Plain English: Even though the case had some tricky points, it was the kind of case the Local Court could handle, so bringing it in the District Court was not justified.
Court's operative orders: judgment $11,900, interest from 12 December 2017, and no order as to costs.
Plain English: Plaintiff wins $11,900 plus interest, but nobody gets their legal costs paid by the other side.
What fact patterns trigger this precedent
Tenancy disputes where the plaintiff sues in superior courts (District Court) despite statutory Tribunal remedies covering similar rights.
Cases where the Tribunal (NCAT) can award compensatory relief under s 187 and monetary amounts are within or near Tribunal limits, but plaintiff is uncertain about jurisdictional reach or chooses court for other reasons.
Cases with some factual or legal complexity which make forum choice arguable, especially where the plaintiff reasonably believed the Tribunal might be inadequate, producing a plausible 'unjust' defence to cost-shifting under s 208.
Conversely, cases where plaintiffs escalate claim values sharply to attract higher court jurisdiction without substantive justification, or where the matter plainly lies within Local Court capacity, will trigger application of UCPR r 42.35 and deny costs.
How later courts have treated it
This decision applies established principles from the Strata/Tribunal jurisprudence (EB 9 & 10), and UCPR authorities (Averkin, Singapore Airlines). It clarifies that s 208's adequacy test is an enforcement-equivalence inquiry and that the 'unjust' exception is substantive and fact-sensitive. Future courts should treat this decision as an application of those principles in tenancy-cost settings and as an exemplar for balancing s 208 deterrence with fairness to litigants who faced genuine uncertainty. Practitioners should expect judges to ask:
Could NCAT have achieved the same binding outcome? and
Would it be unjust (in the circumstances) to penalise the plaintiff for choosing court?
If a later case features clear-cut Tribunal adequacy and no reasonable uncertainty or complexity justifying forum choice, costs orders against the plaintiff under s 208 are likely; if complexity or jurisdictional uncertainty was reasonably held, courts may decline to make adverse costs orders.
Still-open questions
The judgment recognises but does not exhaustively define the contours of what makes a plaintiff's forum choice 'unjust' to penalise under s 208. The boundary between an honest, reasonable uncertainty and unreasonable forum-shopping will require further case-by-case clarification.
The judgment treats 'adequate provision' as an enforcement sufficiency test; subsequent cases will need to refine how differences in available remedies (for instance, interest, declaratory relief forms, enforcement mechanics, or timelines) weigh in close calls.
Interaction between s 208 and alternative procedural safeguards (offers of compromise, Calderbank or UCPR 42.15 offers) remains an area for clarification: the Court noted those principles were not determinative here but did not elaborate how aggressive settlement-making might influence 'unjust' assessments.
The relationship between Tribunal monetary limits and the plaintiff's tactical escalation of claimed quantum to attract higher court jurisdiction remains fact-sensitive; future decisions will further delineate when increased claims amount to abusive jurisdictional shopping versus legitimate reassessment of loss.
Practical takeaway for practitioners: when deciding forum, assess not only the monetary limit but the nature of the remedies required, likelihood NCAT can enforce the same outcome, and be ready to show reasoned justification for District Court selection where complexity or jurisdictional uncertainty exists; otherwise expect that r 42.35 and s 208 may tilt against recovering costs.
Judgment (7 paragraphs)
[1]
Judgment
On 13 February 2020, reasons for judgment were delivered in this matter. [1]
On that occasion I indicated that on my calculation, the compensatory damages to be awarded to the Plaintiff amounted to $11,900 and that the circumstances of the matter lead to the potential application of s 208 of the Residential Tenancies Act 2010 (NSW). [2]
Consequently, the entry of final orders was deferred with directions as follows:-
1. The parties to confer with a view to reach an agreement as to final orders, including costs and any interest claim, within fourteen (14) days by filing consent orders in the registry consistent with these reasons.
2. In default of agreement pursuant to order (1), the parties are to approach my Associate within the same fourteen days with a view of relisting the matter before me for any argument as to final orders as indicated.
3. In the case that (2) applies, each party is to submit proposed draft orders to my Associate within the time specified therein. [3]
Pursuant to (2) and (3) above, the parties advised that they could not reach an agreement as to costs.
The Plaintiff proposed a draft order that there should be judgment in its favour in the sum of $11,900 plus costs on an ordinary basis as agreed or assessed.
The Defendant proposed a draft order that there should be judgment in favour of the Plaintiff but that pursuant to s 208 of the 2010 Act, the Plaintiff is to pay the Defendant's costs as agreed or assessed. The Defendant also proposed that pursuant to s 135 of the Civil Procedure Act 2005 (NSW) [4] the execution of judgment be stayed pending payment of its costs.
Following enquiries through my Associate, both parties indicated a preference for the matter to be determined on the basis of written submissions. [5] In accordance with a timetable agreed by the parties, [6] I made orders in chambers on 4 March 2020 as follows:-
1. The parties' application for costs will be heard on the papers;
2. Defendant to serve its submissions by 3 March 2020;
3. Plaintiff to serve its submissions by 5 March 2020;
4. Defendant to serve any submissions in reply by 9 March 2020.
The Defendant submitted written submissions on 3 March 2020. The Plaintiff submitted written submissions on 9 March 2020. There were no submissions in reply.
In those submissions, the Defendant's primary position was that pursuant to s 208 of the 2010 Act. Alternatively, it contended that in accordance with r 42.35 of the Uniform Civil Procedure Rules 2005 (NSW) [7] the Court should make no order as to costs.
The Plaintiff contended that an order for costs should be made in its favour pursuant to UCPR 42.1.
The Plaintiff also advanced a claim for interest pursuant to s 100 of the 2005 Act.
Following a request to both parties through my Associate, I was informed by the Defendant on 10 March 2020 and by the Plaintiff on 11 March 2020 that should an order by made under s 208 of the 2010 Act the "costs in such amount as the Court determines" should be expressed as "costs on the ordinary basis in such amount as may be agreed or assessed." Otherwise neither party sought to address the matter in oral argument nor in the circumstances consider this further.
[2]
Submissions
The Plaintiff drew attention to the Defendant's denials in the context of its Defence, the Defendant's failure to reasonably negotiate and the Plaintiff's ultimate success on issues of contention. It contended that in these circumstances the Defendant should not be rewarded for taking an unreasonable position. [8]
The Plaintiff's argued that its claim in the proceedings was for damages for breach of contract which is a remedy not available in the NSW Civil and Administrative Tribunal [9] and therefore s 208 of the 2010 Act has no application. [10]
Alternatively, it was contended that it would be unjust and inappropriate to impose s 208 of the 2010 Act and the Plaintiff should not be penalised by way of adverse costs order for underestimating the extent to which the Court would exercise its discretion in the award of damages. [11]
The Plaintiff argued that the subject matter of the proceedings involved extensive consideration of legal issues being arguably beyond the scope of consideration of the Tribunal, such that it cannot be said that the proceedings in the Court were not warranted. The Plaintiff further argued that the nature of the breach and the enquiry into the factual circumstances warranted the commencement of the proceedings in the District Court. [12]
The Defendant submitted that the subject matter of the dispute was an inflated claim for contract damages that were calculated as an abatement of rent in the amount of 85% of the total rent paid over a 3 year period. It submitted that the subject matter was not unique or of great legal complexity and could and should have been made in a timely manner in the Tribunal rather than in the District Court where "the Plaintiff chose to roll the dice rather than realistically assess the claim." [13]
The Defendant argued that the amount of damages proposed being $11,900 fell well within the jurisdiction of the Tribunal and that the 2010 Act otherwise made adequate provision for the Plaintiff to enforce his rights either by a realistic claim for abatement or seeking orders for repairs. [14]
In the event that the first limb of s 208 was satisfied the Defendant argued that that it would not be unjust to award costs in its favour given:-
1. The Plaintiff admitted having previously made an application to NCAT seeking $17,443, but withdrew that application [apparently] on the basis that it was beyond the jurisdictional limit of NCAT. The Plaintiff then grossly inflated his claim to $170,000, being the equivalent of approximately 85% of the sums paid in rent over the entire period [15] of the tenancy without any apparent reason for doing so, citing merely that he had "done a lot of research". In the Defendant's submission, the Plaintiff's claim for such an amount was manifestly unreasonable and excessive.
2. At [219] of the reasons for judgment, the Court was said to make clear, a large part of the claimed loss of amenity was either exaggerated or not credible. The Defendant complained that it was forced to answer the claim for the losses over the entire period of the tenancy where the Court found it would be "inconceivable" to continue to reside in the property if the property was uninhabitable to the extent claimed.
3. The commencement of such proceedings in the District Court reasonably necessitated the Defendant incurring legal costs in defending the claim. Such costs would have likely been wholly avoided in NCAT.
4. The Plaintiff was unreasonable in his offers of compromise, particularly when one has regard to s 208 of the 2010 Act and, moreover, UCPR 42.35 and the Plaintiff's failure to make any appropriate offers of compromise further necessitated the defence of the proceedings and incurring the costs associated with that exercise.
5. Notwithstanding the Plaintiff was partially successful on its claim, it was not successful on its claim for abatement. It was contended that the Court ultimately found that compensation could be awarded under s. 187 of the 2010 Act and proceeded to deliver a judgment on that basis. Such a claim was never advanced by the Plaintiff. [16]
[3]
Consideration
Section 208 of the 2010 Act provides:
Costs in court proceedings
If a court in any proceedings is of the opinion that, having regard to the subject-matter of the proceedings, the taking of the proceedings was not warranted in the circumstances of the case because this Act makes adequate provision for the enforcement by the Tribunal of the rights concerned, the court, unless it is of the opinion that it would be unjust to do so, must order the plaintiff to pay the defendant's costs in such amount as the court determines.
Five things about the section are to be noted.
Firstly, the focus in s 208 is on the "rights concerned."
Secondly in forming the requisite opinion, the Court must have "regard to the subject-matter of the proceedings."
Thirdly, to the extent s 208 refers to the Tribunal, it is in the context that the 2010 Act "makes adequate provision" for the enforcement by it of the "rights concerned." "Adequate provision" does not mean identical provision. The question of adequacy is to be determined by asking whether the 2010 Act provided a means sufficient for the purpose of enforcing the relevant rights. The question to be posed is could the Plaintiff have obtained relief under the 2010 Act which would have enforced (in the sense of brought about in a legally binding way) the same outcome secured by the declaration which the Court has decided it will make. [17]
Fourth, only if the Court is satisfied of the matter identified in the preceding paragraph can it then go on to consider the causative link which must inform the requisite opinion, namely that the taking of the proceedings was not warranted in the circumstances because the 2010 Act makes adequate provision for the enforcement of those rights.
Fifth, even if the requisite opinion is formed the Court cannot make an order for the Plaintiff to pay the Defendant's costs if it is of the opinion that it would be unjust to do so.
In EB 9 & 10 Pty Ltd v The Owners Strata Plan 934 [18] Barrett AJA referred to a somewhat analogous provision in s 226(2) of the Strata Management Act 1996 (NSW). [19] Section 226(2) of the 1996 Act employed the words "not justified" as opposed to "not warranted" contained in s 208 of the 2010 Act. Bearing in mind that distinction, Barrett JA stated:-
In the same way, s 226(2), by employing a "justified" criterion, is concerned with the appropriateness (or inappropriateness), in the whole of the circumstances, of the pursuit of the particular court proceedings rather than proceedings under the statutory scheme of dispute resolution, with the question of appropriateness (or inappropriateness) being judged by reference to the results, in terms of "enforcement" of the relevant right or remedy, that the respective procedural avenues can produce, having regard to the "subject-matter" of the dispute. [20]
[4]
Submissions
The Defendant's alternative argument was that the Plaintiff should be denied costs based on UCPR 42.35. That rule provides that
(1) This rule applies if:
(a) in proceedings in the District Court, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $40,000, and
(b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants.
(2) An order for costs may be made, but will not ordinarily be made, unless the District Court is satisfied the commencement and continuation of the proceedings in the District Court, rather than the Local Court, was warranted.
The Defendant repeated its submissions referred to at [19] and otherwise commented that the Plaintiff had significantly inflated his claim to attract the District Court jurisdiction rather than proceed to the Local Court.
The Plaintiff submitted that the factual circumstances and complex legal consideration meant that the commencement and continuation of the proceeding in this Court was warranted. He contended that considerations given to making that determination are more complex than would have been given by a lower Court.
[5]
Consideration
The Plaintiff having succeeded would ordinarily be entitled to an award of costs in its favour. [33] Even accepting the Defendant's characterisation of the Plaintiff's claim, it did not seek to protect its position by an appropriate offer engaging UCPR 42.15 or Calderbank principles. Had it done so, UCPR 42.35(1)(b) may have had no application. The issue is whether UCPR 42.35(2) operates to disentitle the Plaintiff from a favourable costs order.
Matters relevant to this issue were discussed in Singapore Airlines Cargo Pty Limited v Principle International Pty Ltd (No 2). [34] In short, the Court cited factual complexity as a relevant factor in determining whether a claim should have been brought in the District Court. In particular it was noted that the claim involved the consideration of the expert evidence in relation to the meaning and application of Art 18(2) of the Montreal Convention. [35]
In Averkin v Insurance Australia Ltd (No 2) [36] the Court of Appeal stated:
[15]…The underlying purpose of the rule is clear: it is to discourage people from commencing proceedings in a higher court where they are well within the jurisdictional limits of a lower court: Rousianos at 70. Small claims are ordinarily more efficiently and more cheaply litigated in a court of appropriately limited jurisdiction. Costs are of especial importance in connection with small claims, because costs can readily exceed the amount at stake…
Although this matter was heard over three days, it effectively occupied two days in a running list as both the first and third were effectively half days. Whilst I accept that the analysis involved some complexity, there was no expert evidence and the principal contractual provisions had been subject of previous consideration. In my view the matter fell well within the Local Court's jurisdiction and capacity which extends to claims up to $100,000.
Moreover, the uncertainty with respect to adequacy of the monetary jurisdiction of the Tribunal is not replicated in respect of the Local Court.
The claim initially advanced in the Tribunal sought $17,443. The ultimate pursuit in this Court of $107,000 was based on a claim of significant loss of use over the term of Plaintiff's tenancy. As I stated in my reasons for judgment, it is inconceivable that persons in such claimed circumstances would have continued to reside in the subject property for the length of time in question renewing the tenancy on two subsequent occasions. [37] No explanation was provided on the evidence of how the claim escalated except Mr Pursell's assertion to having conducted further research and obtained greater awareness. [38]
[6]
Orders
For these reasons given in this matter, including those above, I order:
1. Verdict and judgment for the Plaintiff in the sum of $11,900
2. The Defendant is to pay interest on the said sum on the amount from 12 December 2017 to date in accordance with s 100 of the 2005 Act and District Court Practice Note 15 clause 5
3. No order as to costs with the view that each party is to pay their own costs
[7]
Endnotes
Principal judgment dated 13 February 2010.
Hereinafter the '2010 Act'.
At [224].
Hereinafter the '2005 Act'.
Section 62(3)(e) of the 2005 Act.
Email Jeremy Bridgen, solicitor for the Defendant, dated 4 March 2020.
Hereinafter the 'UCPR'.
Plaintiff's Written Submissions dated 9 March 2020 at [2(a)-(c)], [3]-[7] and [12].
Hereinafter "NCAT' or ' the Tribunal'
Plaintiff's Written Submissions dated 9 March 2020 at [2(d)] and [8].
Plaintiff's Written Submissions dated 9 March 2020 at [2(e)].
Plaintiff's Written Submissions dated 9 March 2020 at [10].
Defendant's Written Submissions dated 3 March 2020 at [5].
Defendant's Written Submissions dated 3 March 2020 at [8]-[9].
The claim was actually for $107,000 and it was put to the Plaintiff that the claim was for 80% of the rent paid: see T 42.04-.09; 43.21-.23.
Defendant's Written Submissions dated 3 March 2020 at [10(a)-(e)].
EB 9 & 10 Pty Ltd v The Owners SP 934 (No 2) [2018] NSWSC 546 at [63] Kunc J and EB 9 & 10 Pty Ltd v The Owners Strata Plan 934 [2018] NSWCA 288 at [68] (Barrett AJA, with Meagher and Gleeson JJA agreeing).
[2018] NSWCA 288]; (Meagher and Gleeson JJA agreeing).
Hereinafter the '1996 Act'.
at [68]
EB 9 & 10 Pty Ltd v The Owners SP 934 (No 2) [2018] NSWSC 546 per Kunc J at [33].
See s 44 of the District Court Act 1973 (NSW).
See discussion in Allan Anforth, Peter Christensen, Christopher Adkins, Residential Tenancies Law and Practice New South Wales (2017, 7th ed, Federation Press) at [2.187.15].
Pursuant to reg 23 of the Residential Tenancy Regulation 2010 (NSW).
See also s 6 of the 2010 Act.
See EB 9 &10 Pty Ltd v The Owners Strata Plan 934 [2018] NSWCA 288 at [68] and [71]]. Although the question of different time limits was raised in evidence, this was not advanced as a reason for the bringing of Court proceedings. See Pursell v Eversham Close Pty Ltd (No 1) [2020] NSWDC 372 at [88].
Verdict and judgment for the Plaintiff in the sum of $11,900; Defendant to pay interest on that sum from 12 December 2017 to date under s 100 Civil Procedure Act 2005 and District Court Practice Note 15; no order as to costs (each party to pay their own costs).
Overall, the question to be asked on whether s 208 applies, is could the Plaintiff have obtained relief under the 2010 Act which would have enforced (in the sense of brought about in a legally binding way) the same outcome secured by the Court proceedings by the declaration. [21]
Section 187 of the 2010 Act confers on the Tribunal power to award compensation amongst other remedies.
The power of this Court to award compensation in damages arises in its civil jurisdiction. [22] It was this power that the Plaintiff successfully engaged.
One variation between s 187 of the 2010 Act and the Court's jurisdiction is that the Court can award interest under s 100 of the 2005 Act. However, it has been held that the Tribunal can also do so within its power to order compensation under s 187 of the 2010 Act. [23]
The Plaintiff in this instance claimed interest and the Defendant advanced no reason why interest should not be awarded.
I accept that the Plaintiff is entitled to an award of pre judgment interest on the judgment amount from 12 December 2017 to date in accordance with s 100 of the 2005 Act and District Court Practice Note 15 clause 5.
The Plaintiff accepts that even with interest included the amount recovered falls short of the $15,000 jurisdictional limit of the Tribunal under s 187 of the 2010 Act. [24] It nevertheless contended that the relief it sought was not a remedy available under the 2010 Act.
The fact that the Plaintiff sought "damages" and "interest" in this Court does not preclude the application of s 208 if to use the words of the 2010 Act it is found it "makes adequate provision for the enforcement by the Tribunal of the rights concerned." [25]
Clearly, the Court and the Tribunal have different monetary limits to their respective jurisdictions.
However in light of the rights vindicated in this Court I am satisfied that the 2010 Act made adequate provision for their enforcement in the Tribunal. [26]
The order otherwise mandated still cannot be made if the Court is of the opinion that it would be unjust to do so. This requires some consideration of the purpose of the section.
Section 208 has its origins in s 120A of the Residential Tenancies Act 1987 (NSW). [27] When first enacted, that section read:-
If a court in any proceedings is of the opinion that, having regard to the subject-matter of the proceedings, the taking of the proceedings was not warranted in the circumstances of the case because this Act makes adequate provision for the enforcement by the Tribunal of the rights concerned, the court shall order the plaintiff to pay the defendant's costs in such amount as the court determines.
That wording did not contain the phrase "unless it is of the opinion that it would be unjust to do so."
At the time of s 120A's introduction, the Minister for Housing stated:-
Jurisdictional disputes will be minimized by the provision of a cost disincentive to any party who pursues unjustifiably a tenancy issue through the general court system. These provisions improve the tribunal's responsiveness, efficiency, and economy. [28]
The Explanatory Note to the Residential Tenancies Bill 2010 (NSW), which sought the repeal of the 1987 Act, did not shed light on the reason to include the additional phrase now enacted in the s 208 of the 2010 Act, but rather stated:-
Division 4 of Part 10 (section 208) of the proposed Act re-enacts section 120A of the 1987 Act. [29]
There is no clear discernible reason as to why this phrase was inserted into s 208. Nevertheless, the phrase has been used in other statutory contexts. For instance, Fryberg J stated in R v Bowen:- [30]
Technically, the process of considering that issue does not involve the exercise of a judicial discretion. However it is a process which is closely akin to that involved in exercising a discretion. It involves the formation of a judgment about whether something would be unjust. The concept of justice is imprecise and value-laden, and inevitably, reasonable minds will form different opinions on the question in the same set of circumstances. [31]
As I see it, the purpose of s 208 as now enacted is not to punish a Plaintiff who misjudges their ultimate success falling short of the Tribunal's jurisdictional limit, but rather to act as a disincentive to bring proceedings which were not warranted in the circumstances described.
The Plaintiff in this case was successful in his claim albeit not to the extent that he claimed. Section 208 is not dependent whether UCPR 42.15 or Calderbank [32] principles were engaged. Nor do I consider that the position of the parties in relation to negotiations is of assistance to the formation of the opinion referred to.
In this case, the ultimate award of damages and interest falls within the upper end of the Tribunal's monetary limit. The question is not whether the extent of the loss as claimed by the Plaintiff was unreasonable but whether it would be unjust to make an order,
Aside from questions of liability, the assessment of quantum was intertwined with a determination of the nature of the landlord's obligation, when any breach occurred and the basis on which loss was to be assessed. That determination also involved a degree of factual and legal analysis as disclosed in my reasons. I accept that there was some complexity which added to the uncertainty of the assessment and the question of whether to bring the proceedings before the Tribunal was not straight forward. Whilst the Plaintiff fell short of his expectations, I accept that the uncertainty of whether the matter fell within the monetary limit of the Tribunal's jurisdiction was such that it would be unjust to order him to pay the Defendant's costs.
Beyond that, the Plaintiff's case was initially opened based on abatement but ultimately reformulated as one based on damages referable to the rent paid or alternatively nominal damages. [39]
Overall, the Plaintiff has not drawn attention to any basis upon which the Court could be affirmatively satisfied that the commencement and continuation of the proceedings in this Court as opposed to the Local Court was warranted. [40]
Accordingly the ordinary rule in UCPR 42.35 should apply.
Hereinafter the '1987 Act'.
Residential Tenancies (Amendment) Bill 1987 (NSW), Second Reading Speech, Minister for Housing (Mr Schipp), 3169.
Explanatory Note to Residential Tenancies Bill 2010 (NSW) at page 18.
Referring to s 147 of the Penalties and Sentences Act 1992 (Qld).
[1997] 2 Qd R 379 at 388.
Calderbank v Calderbank [1975] 3 All ER 333.
UCPR 42.15.
[2017] NSWCA 340.
[2017] NSWCA 340 at [18]-[20].
[2016] NSWCA 150.
Pursell v Eversham Close Pty Ltd (No 1) [2020] NSWDC 372 at [219].
T 55.37-56.04.
T 118.1-.15 and T 136.9-.29,
Shield Mercantile Pty Ltd v Citigroup Pty Ltd [2013] NSWSC 287 at [18]-[24].
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 21 October 2020